We rely on the Internet for virtually everything nowadays, and looking for the best personal loans with the best rates is no different.
And because everything has gone digital, it’s become easier than ever to be bamboozled by sly loan scammers who prey on desperate people in dire financial situations. They know this particular market is vulnerable, making it easier for scam artists to appear more savior than scoundrel.
So whether you’re in need of fast loans, cash loans, student loans, bad credit loans, or what have you, the most important thing is ensuring they’re legit loans.
But how do you know you’re working with a legit loan company?
Your safety and peace of mind when seeking a bad credit loan is a major priority for us at Magical Credit. To keep you knowledgeable and prepared, here are a few points that sets off red flags to us, pointing to a potential loan fraud or scam.
This is the golden rule when it comes to any type of legit loans from a legit loans company: you should never need to pay an advance fee to secure a loan.
Just in case that didn’t sink in – do not send up-front fees to any loan companies that ask this of you! Any up front fees to obtain an unsecured, personal loan in Canada is illegal, and has been for years.
When it comes to bad credit loans in particular, financial scam artists will ask for either a security or insurance deposit. They may offer an option to send the money through Western Union, or another online method that cannot be tracked down.
Sending money to an account like Western Union or similar makes it almost certain your money is headed outside of Canada (typically the U.S.) – meaning you won’t be able to recover any lost or stolen funds.
Brick and Mortar
When researching a potential loan company to work with, there are many questions you should be asking yourself.
Do they have a living, breathing human that can be contacted? Do they have a real, physical location? Are they professional and courteous, like they care about their company’s reputation? Does the company operate as an independent, or a franchise? Are they listed on the Better Business Bureau website? Do they have limited contact information to return communications?
If any of these questions produce answers that don’t smell right, something’s probably fishy.
If you were led to a website, or came across the loan company via email solicitation, take note of the marketing professionalism in their copy.
Is the tone, style, and correctness professional? Is everything accurately spelled? Do you notice any excessive jargon? Does it look aesthetically current, and professionally designed?
Answering ‘no’ to any of these questions should once again set off your online loan scam alarm.
A few more Anti-Financial Scam reminders
The three preceding points are the most common, general tips to help sniff out a foul, dishonest loan company. These are a few more reminders that may seem obvious, but can be forgotten about when an enticing, too-good-to-be-true personal loan is dangled in front of you:
- Legitimate lenders will never guarantee that you’ll receive a loan before applying, or before they’ve checked other important information like your credit status or contacting your references. This especially true if you’re seeking a bad credit loan, or have no credit record at all.
- Never share your credit card, bank account, or Social Security number over the phone, by fax, or online, unless you’re familiar with the company and know the reason they need your personal information.
- Don’t pay an individual for a loan – no legit loan company would make this request.
- If you’re feeling uneasy about the company you’re dealing with, look for their name in the phone book or through directory assistance, and call them to make sure you’re really dealing with them. Scam artists will often front as a legit organization, or even as the Better Business Bureau.
If you’ve come across a questionable ad, you can report it Project Phonebusters in Canada toll-free at 1-888-495-8501. You can also contact the Canadian Anti-Fraud Centre, which provides valuable assistance to law enforcement agencies by identifying connections among seemingly ‘unrelated’ cases, like bad credit loan scams.
Finally, for a full list of common fraud cons in Ontario – including financial scams and more – you can visit the dedicated page on the provincial website.
Illegitimate loan companies and scam artists shouldn’t keep you away from seeking the online personal loan you need. But it’s important to be informed about the potential dangers, to protect yourself and your family from these new loan scams springing up across the country.
For legitimate bad credit loans, Magical Credit is a reputable, reviewed loan company backed by thousands of satisfied clients. We offer short term, fast loans to anyone with a source of income and proven debt repayment history.
To apply for a loan today, fill out our online application!